Standing out from the crowd: Dedicated institutional investors and strategy uniqueness

Research summary This article examines the effect of dedicated institutional investors on firms’ strategy uniqueness. We build uniqueness paradox where unique strategies are important drivers economic rent, yet create an information problem whereby CEOs face discounts from capital market, thus discouraging them selecting strategies. propose as a partial remedy to paradox. Dedicated invest in gaining private about their investments, devote effort understanding strategies, and reduce market pressure. Thus, can encourage pursue more Our empirical results show positive influence strategic uniqueness, which is even stronger when firms operate industries that hard value. Managerial Unique be way for managers long-term However, some shy away implementing such fearing short-term oriented does not fully understand benefits hence punishes them. study shows who long-term-oriented, focused, committed help resolve this issue. These owners gather in-depth pressures. Hence, commitment patience reflects high levels responsibility have decision-making. Therefore, we recommend intensify communication between topics (e.g., form stewardship policies).